The great scramble for resources
Executive summary
As geopolitical conflicts, trade barriers, and climate change drive global fragmentation, governments across the world are prioritising resource sovereignty and energy security. Although the global economy continues to demonstrate resilience, it remains vulnerable to supply shocks and sticky inflation, heightened in the short term by material demand for artificial intelligence. Over the longer term, AI adoption is expected to boost productivity, particularly in the US, Europe, and emerging Asian markets. In this macro-driven environment, long-term portfolio management must adapt by focusing on diversification, real assets, equities, alternative assets, and high-quality fixed income with a domestic bias.
Global fragmentation spurs quest for self-sufficiency
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Pursuit of sovereignty amid fragmentation
Geopolitical tensions and trade barriers are compelling states to secure critical resources, leaving the global economy exposed to more frequent supply shocks and price volatility.
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Dual economic impact of artificial intelligence
Short-term demand for materials to power artificial intelligence adds to inflationary pressures, but widespread adoption is projected to enhance long-term productivity across regions.
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Need for strategic portfolio adaptation
An uncertain macroeconomic environment requires refined portfolio management focused on greater diversification through real assets, equities, alternative investments, and high-quality fixed income.
A resilient yet fragile world economy
The world economy has proven resilient, yet it remains vulnerable to more frequent and more severe supply shocks. This uncertain environment is likely to result in more volatile prices, exacerbated in the short term by “techflation” driven by demand for the materials needed to power the artificial intelligence (AI) boom. Emerging markets are adapting and gaining in importance for their resources and infrastructure.
This is the context in which we present our macroeconomic outlook.
This fragmented world is marked by a race for sovereignty and security. A trade war in 2025 and the US-Iran war in 2026 have accelerated the fragmentation of trade, security, commodities and financial markets. Against this backdrop, the global economy has proved remarkably resilient, yet it remains vulnerable to more frequent and more severe supply shocks. Risk premia in energy markets, in particular, are expected to remain elevated.
The fragmented world calls for diversified portfolios with a focus on real assets, including a larger allocation to equities and alternative assets, and a more domestic bias within high quality fixed income.
AI as a new macro and geopolitical force
AI has emerged as a political and geopolitical driver. The AI investment boom is reshaping corporate balance sheets, boosting profit margins and supporting the consumer wealth effect. One challenge will come from government regulation amid a social and political backlash over AI disruption, labour market fragility, and income inequality.
AI is also a productivity booster. We have slightly upgraded our potential growth estimates to reflect a gradual productivity boost from AI adoption. The US is likely to benefit more than the rest of the world, but Europe and Asian EM are catching up. We expect the AI boom to be broadly disinflationary over the longer run.
We expect inflation to remain volatile and sticky. Inflation is forecast to remain higher on average than in previous decades, also driven by commodities and “techflation” in the near term. Over the longer term, secular drivers such as demographics and decarbonisation are fuelling inflationary pressures.
Source: Pictet Wealth Management, LSEG, as at 30.06.2026
Monetary stability, fiscal fragility
We expect central banks to preserve their independence and the anchoring of long-term inflation expectations. Policy rates have moved closer to our estimates of the neutral rate in most regions (3.375% in the US and 2.25% in the euro area), giving central banks more room to ease in the next downturn.
Fiscal vulnerabilities remain an issue. Rising bond yields are exposing the weakest links in the public sector as decades of accumulating debt overhang reduce the fiscal space going forward. However, we do not anticipate an imminent systemic sovereign debt crisis in either the US or Europe.
The European revival is bending, not breaking: Europe has been hit harder by the 2026 energy crisis, but growth is still expected to catch up, driven by multi-year public and private investment programmes in defence, infrastructure and energy. Greater financial and fiscal integration in the euro area remains the direction of travel.
China and emerging markets are at an inflection point. Emerging markets are quickly adapting to a more fragmented world, benefiting from a focus on AI, energy and supply chain security that is creating differentiated opportunities across markets. China is shifting to a lower, but more stable long-term growth model focusing on its strategic priorities.
Today’s increasingly fragmented world is driving a dash to secure resource sovereignty.
The BRICS+ coalition, with China in the vanguard, has shown it can help turbo charge the growth prospects of some of its members. If the coalition manages to effectively leverage the full array of resources and influence at its disposal, these gains could spill over to a wider group of developing nations. We live in a geopolitics- and macro-driven market environment. These drivers are likely to dominate markets for years to come, altering the risk calculus and requiring portfolio management to adapt accordingly.
From global to more domestic allocation
The changing global context has clear investment implications. The fragmented world calls for diversified portfolios with a focus on real assets, including a larger allocation to equities and alternative assets, and a more domestic bias within high-quality fixed income.
*Topographies of Fragility
Series Statement
Topographies of Fragility grew from a lifelong search for places in nature that offer spaces for contemplation, silence, and emotional grounding; landscapes that feel untouched by human presence. Yet over the years, I became increasingly aware of the fragile tension between their apparent permanence and their underlying vulnerability.
While working in my studio, in an attempt to clear space, I began crumpling discarded prints of the very landscapes I had photographed. What started as an unconscious gesture gradually came to reflect the way we often relate to nature itself, as something to be used, consumed and discarded.
Since the photographs exist on paper derived from trees, the manipulated print embodies a direct relationship between material, image, and environment. By physically transforming the photograph, I metaphorically transform the landscape itself, inviting reflection on the traces our actions leave behind. While we shape nature, it, in turn, shapes us.
Photography
Ingrid Weyland is an Argentinian artist whose work explores the fragile relationship between humans and the natural world through photography and material intervention.
Born into a family of sculptors and architects, she developed an early sensitivity to form, space and materiality, influences that continue to shape her practice today. Her work begins with immersive encounters in remote landscapes that become photographic works, later transformed through physical interventions to reflect on environmental fragility, memory, and the lasting traces of human action.
Her work has been exhibited internationally and recognised through awards, exhibitions and publications, including the Saatchi Art for Change Prize (Americas Winner), the Ashurst Emerging Artist Photography Prize, the Aesthetica Art Prize, a nomination for the Prix Pictet, and being selected as a Hasselblad Masters 2026 finalist.
